ITC Ltd., a private sector company in India, announced financial results for the first-quarter ended June 30, 2008, reporting a dip in net profit, despite an increase in revenue, mainly driven by the non-cigarette and agri businesses, coupled with a healthy performance by hotel and paperboards and packaging businesses. The non-cigarettes businesses in aggregate grew by 29%.
The unprecedented increase in excise duties on non-filter cigarettes in the Union Budget 2008, steep increases in commodity prices and store rentals, the launch costs of the additions to the new Personal Care portfolio and the continuing brand building costs in the foods business combined to exert intense pressure on profitability during the quarter, the company said.
The Kolkata-based company posted first-quarter net profit of Rs.748.67 crores, down 4% from Rs.782.87 crores reported in the first-quarter of 2007.
The company said that after adjusting for income tax refunds of Rs.29 crores during the previous year quarter, the net profit for the quarter would have been declined to 1%.
For the quarter, the company's net sales rose 18% to Rs.3,899.70 crores from Rs.3,293.83 crores in the year-ago quarter, while other income was Rs.114.35 crores, up 13% from Rs.101.57 crores for the same period last year.
Gross income for the quarter surged 14% to Rs.5,958.90 crores from Rs.5,248.31 crores in the corresponding quarter a year-ago.
During the quarter, profit before interest, depreciation and tax increased marginally to Rs.1,241.47 crores from Rs.1,229.13 crores in the previous year quarter. Quarterly earnings per share were Re.1.97, down 5% from Rs.2.08 in the corresponding quarter last year.
During the quarter, net revenue from FMCG business increased 12% to Rs.2,431.06 crores from Rs.2,179.92 crores in the prior year quarter, while revenue from Hotels business increased 17% to Rs.238.97 crores from Rs.203.88 crores in the corresponding quarter last year.
Net revenue from Agri business during the current quarter was Rs.1,834.39 crores, up 32% from Rs.1,386.66 crores in the previous year quarter, whereas Paperboards, Paper & Packaging revenue rose 27% to Rs.605.92 crores from Rs.478.76 crores for the quarter ended June 30, 2007.
The company said that the degrowth in the revenues for the agri business segment during the quarter was due to lower exports, consequent to the restrictions on the export of non-basmati rice.
At the BSE, ITC shares are currently trading at Rs.182.85, down by Rs.4.95 or 2.64% on volume of 37.07 lakh shares.
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